Ending the Status Quo in Cacao Sourcing

Thanks to the work of journalists, NGOs, and artists, more and more people are learning just how tragic the status quo in cocoa can be.  Two prominent pieces that have investigated and publicized the issues of child labor, slave labor, and forced labor on cocoa farms are Peter Whoriskey and Rachel Siegel’s article in The Washington Post "Cocoa’s Child Laborers"1 and the Netflix series "Rotten" episode two "Bitter Chocolate."2

Peruvian Cacao Farmer

To date, child labor, slave labor, or forced labor has never been found by third-party auditors, partner NGOs, or by TCHO directly at any of our cacao suppliers.  We condemn all forms of child and worker exploitation and it is a priority of our sourcing program, TCHO Source, to constantly improve the impact of our cacao purchases and the equity of our supply chain.

Some of the specific actions TCHO takes to ensure integrity in our supply chain are: 

 1)  Paying above market price for every cocoa bean we buy.  The Washington Post article “Cocoa’s Child Laborers states, “Meanwhile, some experts note, what might be the most straightforward means of addressing child labor is scarcely mentioned: paying the farmers more for their cocoa.  More money would give farmers enough to pay for their children’s school expenses; alleviating their poverty would make them less desperate.
Under the Fairtrade program, cocoa farmers receive an extra 10 percent or more of prices, but that is not enough to lift the typical Ivorian farmer out of poverty.”

TCHO pays well above market price for every cocoa bean we buy.  This past year on average, TCHO has procured cacao beans for 46% above the average market price.  For our certified cacao beans, TCHO pays a Fair Trade premium of $240, an Organic premium of $300, and a quality premium ranging from $100 to $1500 per metric ton (MT) on top of the market price for cacao.   For the non-certified beans we purchase, we pay a quality and/or an origin-based premium over market price as well.  These premiums are additional cash per MT of cocoa beans for co-ops and farmers to use to reinvest in their farms, maintain certifications, provide healthcare services to their members, cash payouts, and more.  We never pay just the base commodity market price for any of our cocoa beans, as the bearish market prices often do not even cover the cost of production, let alone a living wage.
Chocolate Market Curve + TCHO Premiums
Chocolate Market Curve + TCHO Premiums Key

2) Certifications.
  Most of the cocoa beans TCHO purchases are Fair Trade and Organic Certified.  We buy these beans from a small number of vetted Fair Trade Certified Groups.  Each of these groups receives at least two audits per year (one for Organic and one for Fair Trade).  If the group is considered higher risk, Fair Trade will conduct additional unannounced audits.  Fair Trade requirements include no child, forced, or slave labor, as well as having viable prevention plans executed for all.  

3) Long Term Partnerships.
 We have worked with many of the same suppliers for over 10 years.  We visit and host all of our partners frequently and maintain strong, direct relationships.  This open line of communication and trust, as well as our suppliers' proven track records in providing financial and social benefit to their members, gives us a lot of confidence in the farms and farmer organizations we buy cacao from.  

4) Additional investments in the farming communities we purchase from.
   TCHO has carried out two USAID funded programs (totaling more than $4.5 million USD in investment) over 8 years with our cooperative partners and cocoa research institutions in Peru, Ecuador, Dominican Republic, and Ghana.  Our collaborations focus on improving the strength of these cooperatives with tools, infrastructure, practices and systems around quality, capital reinvestment, and raising the incomes farmers receive from cocoa farming.  

5) Additional partnerships in higher risk areas.
 There are many small chocolate makers who avoid sourcing cocoa beans from West Africa completely to avoid implication in this complicated and tragic issue.  TCHO sources beans from Ghana and Democratic Republic of Congo, two countries that are considered higher risk for these issues.  Our strategy is to partner with well-vetted groups who share our vision to focus on cacao quality and receive cash premiums in return for their quality, social, and farming practices. 

The suppliers of our Fair Trade Organic cocoa beans from Ghana and Democratic Republic of Congo have additional partnerships to promote child wellbeing in their communities.  Our supplier in Ghana partners with the International Cocoa Initiative3 to prevent child labor and our supplier in the Democratic Republic of Congo works closely with the Eastern Congo Initiative.4
 
While we highly value both delicious flavor and high-quality beans, these attributes wouldn’t be possible without our cooperative partners at origin who have worked with us for years to co-create the best cacao beans.  Through these partnerships, we’ve seen the hardships and economic adversities that continue to challenge the cacao industry and strive to support the continued efforts to prevent the use of any kind of child, forced, or slave labor through the programs above and an equitable supply chain.  Here at TCHO, crafting great chocolate goes far beyond delicious flavor and quality.  


References:
Whoriskey, Peter & Siegel, Rachel (2019) "Cocoa’s Child Laborers" The Washington Post,  June 5, 2019 

Rotten- Season Two – Episode Bitter Chocolate  Directed By Abigail Harper and Produced by Zero Point Zero, 2019

International Cocoa Initiative

Eastern Congo Initiative